OFT plans action on debt management problems

Wednesday, 29 September 2010 12:00

The Office of Fair Trading (OFT) has announced it is to act on concerns relating to the debt management industry, after carrying out a report revealing unsatisfactory conditions within the sector.

A total of 129 debt management firms have been cautioned by the OFT, which has told them that they must improve their compliance with Debt Management Guidance or face losing their licence.

Low industry awareness of the consumer complaints-handling Financial Ombudsman Service was one of the areas identified for improvement.

Incompetent and poorly informed frontline advisers was another.

However, by far the largest area of concern, according to the OFT, was that many companies are claiming their services to be free when they are not.

In response to the OFT report, the Consumer Credit Counselling Service noted the poor performance of the fee-charging debt advice sector.

External affairs director Delroy Corinaldi argued instead in favour of debt charities, whose advice is not only free but is also independent of any commission-paying entities.

• Tags:
• news